2. Crowdfunding What is Crowdfunding? Fact vs Fiction. How does it work? & Why does it work? How can we use crowdfunding? Success & benefits: For entrepreneurs & communities Beyond the headlines and hype: How can crowdfunding help our economy? 3. CJ Cornell is ... 4. First, lets talk about Entrepreneurship & Arizona 5. 1 # AZ Entrepreneurship 6. 10 top Places to do business 7. 46th in the U.S.A. venture capital, equity investing 8. Were Great at Starting up (planting Seeds) ** ** and just AWFUL at outcomes quality, scale, wealth & economic growth 9. WERE NOT THE ONLY ONES ** (fostering entrepreneurial success is hard) 10. concept IPO (market share, revenues etc ) Product (Risk, growth) Entrepreneurial Growth concept->product->market->profit $ $ $ $ Venture Capital Angels (accelerators/incubators) 11. Starting a company is easier than ever but growing a company is harder & riskier than ever 12. The Series-A Crunch 13. Crowdfunding Crowdfunding concept IPO (market share, revenues etc ) Product (Risk, growth) Entrepreneurial Growth concept->product->market->profit $ $ $ $ Venture Capital Angels (accelerators/incubators) Crowdfunding Crowdfunding 14. What is Crowdfunding ? 15. The safety of crowds The passion of crowds The wisdom of the crowds Crowdfunding 16. Source: http://theyec.org/making-sense-of-the-jobs-act-and-crowdfunding-infographic/ 17. Source http;//crowdfunder.com 18. Source http;//crowdfunder.com 19. 0 Equity (investment) crowdfunding in US cases 20. 2015 Equity crowdfunding practical in US 21. 0 FRAUD cases 22. Equity Crowdfunding - not in the USA (yet) JOBS act (April 2012) technically enables CF but has not yet been approved by SEC. No documented fraud in USA or other areas. Equity CF is for high growth companies seeking significant funding from experienced investors Will dramatically change in 3-5 years (CJ prediction) www.propelarizona.com WYNTK(what you need to know) 23. Rewards based, contribution crowdfunding The Kickstarter model donations 24. THE KICKSTARTER MODEL Rewards-based, Donation Crowdfunding: 25. ALL OR NOTHING 26. Perks & Rewards 27. Updates (and Blogging) 28. Updates (and Blogging) 29. Comments & Engagement 30. Kickstarter (2012) 2.2 million people pledged a total of $319,786,629 (up 221% from 2011) Backers pledged $606.76 per minute People in 177 countries backed a project in 2012 (That's 90% of the countriesin the world) 31. Source: http://KickstartersHQ.com 32. WHY Do people Crowdfund? 33. Lessons from Ethan Mollicks The Dynamics of Crowdfunding: Determinants of Success and Failure 34. 3 Whys: 1. They connect to the greater purpose of the campaign 2. They connect to a physical aspect of the campaign like the rewards 3. They connect to the creative display of the campaigns presentation three main reasons why people unconnected to a project or business would support it: What Is Crowdfunding And How Does It Benefit The Economy - Forbes http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy 35. The Real (Crowdfunding) Whys Passion For the technology For the industry For the cause For the product Affinity For the Entrepreneur For the region, industry etc Connection Every reason BUT R.O.I. 36. emotional ROI. Not financial ROI WYNTK(what you need to know) Crowdfunding is about 37. (when crowdfunding ) its not what you do, but why you do it, WYNTK(what you need to know) 38. http://www.kickstarter.com/projects/1104350651/tiktok-lunatik- multi-touch-watch-kits 39. http://trendwatching.com/trends/infographics/presumers/ Consumers who want products before they are developed Pre-orders Early adopters Supporters 40. UH OH The Kickstart Model.. 41. 1. Crowdfunding = New 1st Money for ventures ($10k - $50k average but wild exceptions) 2. Equity Crowdfunding is Still Far away 3. Rewards based Model IS Crowdfunding today 4. All or Nothing Crowdfunding Standard 5. Perks and Rewards: Pre-order Crowdfunding 6. Social Media & Content Intensive www.propelarizona.com WYNTK(what you need to know) 42. What does success look like? 43. The iPhone-friendly Pebble watch earned $7.6 million more than its $100,000 goal. And the Galileo iPhone platform closed its Kickstarter campaign at $702,000, far surpassing its $100,000 goal. 44. Ouya raised $2 million in one day for a new Android gaming console (its raised more than $5 million to date), the Nifty MiniDrive, external memory for Apple MacBooks. The tiny storage company is more than 2,000% above its $11,000 goal with 15 days left in the campaign. 45. What do successful campaigns have in common? 46. http://www.kickstarter.com/projects/hop/ele vation-dock-the-best-dock-for-iphone 47. Projectio http://www.kickstarter.com/projects/1209578799/projecteo-the-tiny-instagram-projector 48. http://www.kickstarter.com/projects/mikebond/ti2-sentinel-titanium-cache?ref=home_popular 49. http://www.kickstarter.com/projects/poots/kingdom-death- monster?ref=home_popular 50. http://www.kickstarter.com/projects/smartthings/smartthings-make-your- world-smarter?ref=category 51. http://www.kickstarter.com/projects/thejumpshot/jumpshot-a-new-weapon-to- battle-pc-frustration?ref=category 52. http://trendwatching.com/trends/infographics/presumers/ 53. Successful campaigns took an average 11 days preparing for their launch. http://blog.indiegogo.com/2013/01/12-insights-for-2012.html 54. Campaigns ran an average 49 days in 2012, as opposed to 60 in 2011. Successful campaigns fundraised for 39 days. 55. Crowdfunding Myths & Mistakes Myth #1: If You Build It, They Will Come Myth #2: Cash is Free Making it about you Unrealistic Expectations Lack of clarity No call to action Expecting to be found: (No Marketing) Ignoring Small Donations/Donors http://kickstartershq.com/articles/5-project-crushing-kickstarter-mistakes-how-to-avoid-them http://www.crowdsourcing.org/document/3-big-crowdfunding-myths-via-funderhut/23804 56. www.propelarizona.com WYNTK(what you need to know) Successful Crowdfunding Campaigns Focus on The new 4 Ps the 1. the 2. the 4. the 3. 57. focus on them not your company WHO are they? What motivates them? Interests, Values the 1. The new 4 Ps of Crowdfunding .. www.propelarizona.com the 2. You are pitching to them TELL A STORY !! WHY is more important than $$ VIDEO(s) & VISUAL(s) Tell the story in small chapters VIDEO(s) & VISUAL(s) And even smaller sound bites Give them a Story they can tell to others. the 3. $$ Value is a negative driver ! UNIQUE Its about THEM EXCLUSIVE And what is important to Them FIRST Make sure it is BUZZWORTHY the 4.Its a daily/hourly effort SOCIAL MEDIA Its a conversation UPDATES, BLOGS, NEWS Provide Value, and Talking Points RE-POST, TWEETable Its about for their network VALIDATION & EVIDENCE 58. Crafting a Successful Crowdfunding Campaign 59. Some initial rules . 60. 1. Crowdfunding takes work, new skills. 2. It takes a strategy, and preparation. 3. The rules are different. 4. You cant just post and run 5. Its a public success or failure that stays on your resume www.propelarizona.com WYNTK(what you need to know) 61. Components of a Crowdfunding Campaign 62. Title & Short Description (repeatable & compelling) Long Description (The Pitch) Make it a story about them Visuals: Video, Photos, Images Team, Deliverables, Details Perks & rewards Funding Goals: Amount and Timeframe Updates & SOCIAL MEDIA CAMPAIGN Repeatable Messages Daily routine Traditional marketing too 63. Crafting the Pitch 64. First: Who What Why When The 3 Whos: Who are the donors? (affinity & passion) Who is benefits? (the market) Who are you? The 3 Whys Why would your donors care? Why does the market care? Why are you the right team to do it? 65. First: Who What Why When What is your project & goal? Understandable & Simple Compelling & Intriguing Repeatable & Memorable How and When How will you achieve your goal? Realistic? When, after funding? When will I get my perks? 66. Other Tips Tell a story Make it about them The History of the idea is intriguing What is the Impact? why is this important? Try a FAQ Call to action get them involved! 67. Exercise Craft the Pitch 68. Crafting your Pitch Title & Short Description (repeatable & compelling) Long Description (The Pitch) Make it a story about them Visuals: Video, Photos, Images Team, Deliverables, Details Perks & rewards Funding Goals: Amount and Timeframe Updates & SOCIAL MEDIA CAMPAIGN Repeatable Messages Daily routine Traditional marketing too Tell a story Make it about them The History of the idea is intriguing What is the Impact? Why is this important? Try a FAQ Call to action get them involved! The 3 Whos: Who are the donors? (affinity & passion) Who is benefits? (the market) Who are you? The 3 Whys Why would your donors care? Why does the market care? Why are you the right team to do it? What is your project & goal? Understandable & Simple Compelling & Intriguing Repeatable & Memorable How and When How will you achieve your goal? Realistic? When, after funding? When will I get my perks? 69. Pitch Notes - 1 Who (donors, market) Why the story Impact (on the market) Impact (on the donors) 70. Pitch Notes - 2 Story, and History FAQ Perk Ideas (whats important to donors) Calls to Action 71. Visuals 72. The Importance of Visual Media 64% of successful campaigns in had pitch videos. Campaigns with videos under 5 minutes were 25% more likely to reach their goal than those with videos that were longer. Average campaign vid